- Bitcoin’s jump to over $41,000 increased the miners’ hash price.
- Nearly 11% of block mining rewards came from transaction fees.
The weekend fun increased for crypto enthusiasts like Bitcoin [BTC]The world’s largest digital asset by market capitalization rose above $41,000 for the first time since April 2022.
At the time of publication, BTC exchanged hands for $41,322, AMBCrypto noted CoinMarketCaps facts.
The optimism surrounding spot ETF approvals has been a major catalyst behind the pump, as AMBCrypto has reported in several of our recent articles.
Miners celebrate high ROI
Like other participants, Bitcoin miners were also in a festive mood.
Hashprice, considered a key barometer of miner profitability, jumped to a six-month high of $87 per PetaHashes per second per day (PH/s/day), data sourced from the Hashrate Index showed.
In fact, at the time of writing, the hash price has more than tripled in value since the rally began in mid-October.
Source: Hashrate index
Hashprice is a well-known mining metric that quantifies how much a miner can expect to earn with a specific amount of hash rate. It is positively correlated with changes in Bitcoin’s price, which explains its significant increase in value.
The higher returns on investments in expensive mining equipment indicated sustainability in the mining sector. The lucrativeness could pave the way for more players to enter the sector.
Network costs are rising
In addition to the price of Bitcoin, the hash price is also directly related to the transaction fees that miners earn. At the time of writing, almost 11% of mining rewards came from fees, marking a significant increase in recent days.
With Bitcoin block rewards decreasing every four years, miners’ dependence on fees is sure to increase. In light of this, the increase in reimbursements was a positive development.
Source: Hashrate index
Read Bitcoins [BTC] Price prediction 2023-24
This was further investigated by AMBCrypto using Glassnode data. As shown below, fees trended lower for much of 2023, with the exception of the spikes driven by Ordinals. The increase increased miners’ total income.
Going forward, continued periods of high on-chain traffic, and therefore costs, could help offset the downsides of lower rewards.
Source: Glassnode